Illinois Budget FY15

12:00 am

Thu March 27, 2014

Quinn Tax Hike Plan Sets Stage For Governor's Race

Gov. Pat Quinn delivers his annual budget address on the House floor Wednesday. In his speech, Quinn called for extending the 2011 income tax hike.

Credit Hannah Meisel/WUIS

Plenty can, and will, happen before voters go to the polls in November to chose their next governor. But a central theme of the campaign emerged Wednesday, when Gov. Pat Quinn proposed making permanent what was supposed to have been a temporary hike in the state's income tax. His Republican opponent, Bruce Rauner, favors letting the increase lapse. Their competing visions mean a lot is at stake ahead of the upcoming election, as well as for the state's future.

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Gov. Quinn proposes keeping the current income tax rate permanent, even as he runs for re-election - an extended report from Amanda Vinicky

Here's something you don't expect: A candidate. Running for re-election in what's expected to be a really tight race. Campaigning to raise your taxes.

But that's just what Gov. Pat Quinn proposed during his annual budget address.

Granted, he didn't say that outright -- this was just about as close as he got: "This comprehensive tax reform plan would maintain current income rates ..."

Catch that? Just in case: "maintain current income rates."

Illinois' personal income tax rate is 5-percent, a two-percentage-point increase from what it was four years ago. But it's set to begin gradually rolling back, starting in January -- midway through the next fiscal year.

Though Quinn glossed over it during his big speech, he's proposing keeping the higher rate, permanently.

Something that, no surprise, at least one poll shows is not popular with voters.

To be sure, a candidate wouldn't flirt with potential political suicide lightly. Quinn says he cut a total of $5.7 billion dollars from the state budget over the past few years, by closing state facilities and renegotiating contracts. But he says, says at this point, it's either keep the higher tax rate, or else.

"If action is not taken to stabilize our revenue code," he says, "extreme and radical cuts will be imposed on education and critical public services. Cuts that will starve our schools and result in mass teacher layoffs, larger class sizes and higher property taxes."

Quinn says those "savage" cuts will mean victims of domestic abuse will not get shelter and seniors will lose in-home assistance.

"Listen to the rhetoric: Draconian, radical," says Senator Dale Righter, a Republican from Mattoon. "Hundreds of thousands of people dying in the streets and children not being able to learn.' ... It is theater here. And it's designed to drive home the perception that but for another multi-billion lift of money out of taxpayers' pockets this state government simply can't survive."

Righter, and other Republicans, say Quinn is exaggerating the "what if" claims, in an attempt to justify raising taxes. Republicans say it's time for new leadership. New leadership, as in -- Bruce Rauner. The GOP's nominee for governor pounced on Quinn's budget proposal. In a statement, he says Quinn broke his promise and is doubling down on a failed policy.

Rauner says if he becomes governor, he'll balance the state budget without tax increases, by growing the economy and restructuring state government.

Which sounds good. But just how he'd do that is unclear. Rauner hasn't provided specifics and wasn't at the Capitol where reporters could press him for details. His plans so far seem to rely on reducing public employee unions' strength. And unlike Quinn, Rauner has not ruled out taxing retirement income.

The governor didn't mention Rauner by name during his speech, but remarks like this were clearly aimed at him.

"The truth is, those who are telling you that Illinois can tax less and spend less and still expect to fund education are simply not telling you the truth," Quinn says. "The truth is, Illinois is spending less - billions less - even as demands have grown."

Regardless of the Republicans' critiques and how loudly they're denouncing Quinn, Democrats remain in charge of Illinois government. Senate President John Cullerton has signaled his support for Quinn's plan. And in an interview with the public television show "Illinois Lawmakers," House Speaker Michael Madigan indicated he'll support Quinn's tax, too.

"He told the truth. He laid the cards on the table. If we wish to continue to provide the level of services which we've become accustomed to for education and other purposes, then the income tax increase should be extended."

Madigan says it's a chance to "treat the ills" of the tax code. And it meets what he called his "demand" for property tax relief -- the governor's budget would give every homeowner a $500 check from the state. It also shores up education funding.

Illinois would get the money to pay for it from the extended tax hike.

Though legislators often wait until after the November elections to take tough votes, like raising taxes, Speaker Madigan says he expects it will be resolved before session adjourns at the end of May.

But the Speaker also continued to express support for his so-called "millionaires" tax -- which was not part of the governor's proposal.